HP, Dell join forces in DVD war

By PETER GRIFFIN

The battle to control the lucrative market for rewritable DVDs (digital video disks) has taken a new turn with the world's leading PC maker joining rival Hewlett-Packard in backing the DVD+RW format.

The belated endorsement by Dell Computers is a major coup for the DVD+RW Alliance, the group that was set up to push the DVD+RW format.

In addition to the computing players, the alliance has Philips, Sony, Ricoh, Thomson Multimedia, Yamaha and Mitsubishi Chemical among its members.

Last month Hewlett-Packard unveiled to journalists the DVD+RW drives it plans to ship this year. The drives will retail for below $US1000 ($2468) and, along with new additions to its printer, scanner and digital camera ranges, will spearhead Hewlett-Packard's assault on the consumer electronics market.

In a battle often compared to the one between videotape formats Betamax and VHS, DVD+RW is competing with rival formats DVD-RW and DVD-RAM to become the industry standard in recordable disks.

But, as with the videotape wars, the struggle for supremacy among the DVD standards may have as much to do with marketing power and reach as the technical superiority of the formats.

All three formats record to 4.7-gigabyte disks similar to those used for DVD movies. DVD+RW and DVD-RW have the advantage of being compatible with the millions of DVD movie players already in homes around the world. DVD-RAM, supported by vendors such as Panasonic and Hitachi, was first to market, but suffers from compatibility problems.

Hewlett-Packard says vendors such as Panasonic, with its low-cost DVD-RAM offerings on the market, are selling as few as 5000 units a month. But the arrival of DVD+RW drives has been talked about for three years and the market has been cautious in welcoming the format with no commercially available units so far available.

"Seeing a demonstration here is one thing; we'll see how they do when they start shipping the drives in numbers," one analyst said.

But the current members of the DVD Alliance account for around 75 per cent of the market for CD-RW drives, which now ship with 40 per cent of PCs sold.

Chuck Weirauch, director of future technologies at Hewlett- Packard's Colorado Personal Storage Solutions and the man who helped develop the DVD+RW format, said Dell's long-considered decision to join the alliance showed the PC industry was finally settling on a favourite format.

"There is healthy competition between the other members. While we've developed the format together, we then go out and compete against each other. We're not just pushing intellectual property."

What will turn home users on to DVD+RW will be the wave of software suites set to hit the market in coming months, allowing the easy copying, editing and playback of audio and video on the disks.

Hewlett-Packard has already signed an agreement with US-based Sonic Systems to bundle its video editing suite with the DVD+RW drives soon to be released.

The MyDVD software allows users to easily create their own DVDs, complete with menus, introduction screens and the ability later to burn new video clips to the disk.

A spokesman for Sonic said DVD+RW would probably follow the same path as CD-RW, falling in price rapidly while rising in popularity.

He expected the price of drives to settle at around $US399 and the disks to retail for as low as $7.

And while the transfer of home movies from video to DVD and recording TV programming will fuel consumer demand for the drives, data storage is another market opportunity. Some disks will be dual-layered and dual-sided, giving a capacity of up to 17Gb.

With the majority of PCs now selling with hard drive capacity of between 20Gb and 60Gb, DVD disks, with a life expectancy of about 100 years, could become the favoured storage option.

"That's why we're including a backup system. Someone can back up their entire hard drive with four or five disks, where the same backup would normally take up to 30 CD-RWs," said Mr Weirauch.

The ease and low cost of using DVDs for data backup and storage were expected to drive the high-end market for the new drives.

"Most have rejected the use of tape and for a while Zip drives filled a void, but CD-RW had much better compatibility. Now DVD+RW will supersede that for storage."

Philips, Hewlett-Packard's stablemate in the alliance, plans to release a standalone DVD+RW unit to the New Zealand market in October for between $5500 and $6000.

Philips New Zealand's director, Errol McKenzie, said the main advantage of the DVD+RW was its compatibility with existing Machines.

"We see the backwards compatibility and versatility of the DVD+RW format as being its key differentials over other formats."

And while consumers could buy a computer-based DVD+RW drive for considerably less, he believed demand for standalone units would be strong.

"It is highly likely that similar technology will exist in single-person [PC] and multi-person [TV] appliances to cater for needs," Mr McKenzie said. "Home networking may eventually see a multiformat 'driver' capable of delivering the same or mixed programmes to a number of monitors in the home, ranging from 17-inch LCD to 50-inch plasma screens, depending on needs."

* Peter Griffin attended HP Lab 2001 in Cyprus as a guest of Hewlett-Packard.

Links


DVD Forum

DVD+ReWritable Alliance

Hewlett-Packard

Sonic